‘There has not been such dynamics since 2007’: Russian media advertising market grows ‘fantastically’
Kazan online services earned 2.3 billion rubles from advertising, 1.4 billion — from outdoor advertising, and 735 million rubles — from video
Despite the upheavals that occurred in 2022, the advertising industry has not just survived but has made a very serious step forward, the Association of Communication Agencies of Russia stated. According to the report on advertising market results for 2023, which was formed this time using a new methodology, the total volume of the country's media advertising market amounted to 730 billion rubles last year — almost a third more than a year earlier. Almost all segments showed if not record-breaking then quite a lot of growth.
Growth of 30% for the first time since 2007
The volume of the Russian media advertising market in 2023 amounted to 730 billion rubles, which is by 30% more than a year earlier. “This is a fantastic growth. There has not been such a dynamic in the advertising market since 2007. Despite the upheavals that occurred in 2022, the advertising industry has not just survived but has made a very serious step forward," Sergey Veselov stressed. But if we take into account the withdrawal of foreign companies and the almost complete “collapse” of the advertising market in 2022, then such growth no longer seems fantastic.
The media advertising market (that is, the sites where advertising is placed) is not all that is included in the advertising industry. Another fairly large part consists of marketing services, which include rewards from advertising agencies, marketing research, and retail promotion (traditional stores and marketplaces). All this is included in the market of marketing services, the volume of which amounted to 109.2 billion rubles in 2023. The growth dynamics compared to 2022 was 10%. According to Elena Leonova, the director general of the Progression Group and head of the organising committee of Perspectum Awards, the maximum growth of the marketing services market occurred in the fourth quarter.
As a result, the total volume of the marketing communications market amounted to 1.7 trillion rubles in 2023.
The volume of the regional advertising market amounted to 71.5 billion rubles. However, we are not talking about the whole of Russia, but only about 15 major cities, not counting Moscow. Kazan is one of the five cities that have shown high growth in the advertising market. The volume of advertising in the capital of Tatarstan in 2023 amounted to 4.7 billion rubles, and the dynamics was 33%. Half of the advertising volume accounted for Internet services (2.3 billion), followed by outdoor advertising (1.4 billion), video (735 million) and audio (210 million).
For comparison, the market volume of St. Petersburg amounted to 21.5 billion rubles. Nizhny Novgorod — 6.5 billion, Yekaterinburg — 5.8 billion, Krasnodar — 5.2 billion rubles.
Digital advertising squeezing out classic media
The Association of Communication Agencies of Russia (ACAR) has formed a working group that has been putting the new segmentation in order for eight months. Now the “video” section includes not only advertising on television and on TV channel websites, but also all video advertising on all possible media. In 2023, it was sold for 231.5 billion rubles, and the growth rate was 20%.
The audio segment grew by 32% more than the overall market dynamics in 2023. The volume of the audio advertising market amounted to 20.2 billion rubles. Of these, 19.5 billion rubles accounted for radio stations, and 0.7 billion rubles — digital audio. Audio ads are considered separately in Moscow, together with federal placement, as well as separately by region. The radio advertising segment in Moscow and online grew at a slightly higher rate compared to regional ones. The main advertisers in this category were companies related to motor transport, finance, real estate, as well as the public sector. Yulia Andryushova, the director of the Department of Business Communications and Analytics at Gazprom Media Radio, believes that in 2024 the audio segment will show growth no less than in 2023.
The advertising publishing business market was estimated at 25.4 billion rubles, and its growth was 10%. Mainly due to digital content, the volume of which amounted to 20.8 billion rubles, and the dynamics — 14%. But the volume of printed advertising, on the contrary, decreased by 4% compared to the previous period and amounted to 4.6 billion rubles. Elena Zarozhnaya, the co-chairman of the ACAR Publishers Committee and director of Press Procurement at the Rodnaya Rech Group of companies, believes that experts forecasted an even greater decline in the print market. By the way, the ACAR report did not reflect data on revenue from native advertising and special projects. The foreign one assumes that they amount to more than 4 billion rubles.
Andrey Berezkin, the director general of ESPAR-Geo, called 2023 a record year for Out of Home. The growth rate was 41% and broke the growth record in 2008, and the market volume amounted to 67.1 billion rubles. Outdoor advertising grew by 38% (57.7 billion), transit advertising — by 75% (7 billion), indoor advertising — by 30% (2.4 billion). At the same time, the share of digital outdoor advertising was growing rapidly for several years, by 64% in 2023. More than half of the revenue from outdoor advertising comes from digital advertising media (30 billion rubles). The demand for advertising on digital is also growing. Berezin noted a 15% increase in the number of customers in this segment. At the same time, the number of clients with an advertising budget of 1 billion rubles has also increased. There were two in 2022 and five in 2023. Sber spent the most money on outdoor advertising in 2023.
But with online services, everything is much more complicated, because there are a lot of categories within the segment. And new ones appear every year. For example, advertising in messengers, which has recently entered the market. Nevertheless, they counted everything they could. The volume of the Internet services market in 2023 amounted to 386.6 billion rubles and showed a dynamics of 37%.
“The Internet and all its digital components are the drivers of all segments and all media. Because the principles that interactive advertising has developed over the decades of its development are borrowed by other media. This is instant changeability, a large amount of data, and the ability to include different advertising formats in unified communication strategies. The digitalisation process continues, so the growth rate will continue in 2024," commented Boris Omelnitsky, the director for strategic market development at Yandex.
Sergey Veselov believes that such an increase in the advertising market in 2023 is associated with the activation of Russian companies after the withdrawal of foreign ones (foreign brands provided a quarter of the advertising market volume). Roughly speaking, it was almost impossible for even federal Russian companies to fight advertising budgets with international corporations. Therefore, it was simply economically unjustified to invest a lot of money. According to Veselov, now Russian companies have seen the point of joining the fight for consumers through advertising.
How advertising market was assessed
This time, the Association of Communication Agencies of Russia (ACAR) has changed the counting system. In the analysis of the advertising market for 2023, the previous segmentation option was abandoned. Now there is no division into television, radio, print media, outdoor advertising and the Internet. This is primarily due to digitalisation and blurring of boundaries between advertising media. “This is not a whim, it is a reflection of the changes that have taken place in the industry. Digitalisation has had a direct impact on the advertising market. Online and offline advertising often complement each other. Therefore, we have switched to a new market segmentation system," said Sergey Veselov, the co-chairman of the ACAR Commission of Experts.
The new segments now include video (television and online video), audio (radio stations and digital audio), publishing (print and digital products), outdoor advertising and Internet services (all types of online advertising). “This is not a breakdown of the system that used to be. We recalculated the year 2022 in the new system and compared it in dynamics. The new recalculation was quite correct," Veselov said.
The second change affected the data that is in the Unified Register of Online Advertising (ERIR). Since September 2022, an amendment to the law “On Advertising” began to take effect, according to which all online advertising must be labelled. During the year after the amendment was introduced, no fines were imposed for the lack of labeling, and since September last year, they began to strictly monitor the implementation of the law. According to Sergey Veselov, the data on the volume of online advertising from the ERIR do not contradict the figures obtained by ACAR. Besides, Veselov believes that labelling has generally increased the transparency of online advertising market. For example, this year for the first time we were able to estimate regional budgets for online advertising.